HARRISBURG – State officials voted Wednesday to move forward with a parking transaction expected to generate more than $270 million to help pay off the capital city’s debt.

The Pennsylvania Economic Development Financing Authority’s board unanimously approved a resolution authorizing the debt issuance and terms of a 40-year lease of Harrisburg’s public parking facilities after about two hours of discussion Wednesday afternoon.

The state financing authority plans to hire Standard and Trimont Real Estate affiliate PK Harris to run the garages.

Board members questioned bond lawyers, consultants to Harrisburg’s state-appointed receiver William Lynch and representatives from Guggenheim Partners and Standard Parking about staffing, logistics, tax-exempt status of the transaction and other details of the deal that’s been widely described as extraordinarily complex.

"This transaction is the linchpin of the Strong Plan," financial consultant Steve Goldfield said. "I cannot overstate its importance for the city of Harrisburg."

Before the vote, Goldfield told the board that Standard & Poor's had assigned ratings to three bond issues involved in the transaction:

AA for a $99 million issuance backed and another for $71 million, both backed by Dauphin County

BBB for a $100 million or so issuance that might also be insured by AGM

AGM and the county are the city’s biggest creditors with claims exceeding $300 million for payments made on behalf of the city and the Harrisburg Authority for debt issued to pay for ill-fated retrofits of Harrisburg's incinerator.

In addition to $90 million from selling the incinerator, the county and AGM will be repaid at least $120 million from the parking-facility transaction.

They'll get another $97 million in revenue during the last 15 years or so of the lease before the facilities revert back to the city.

AGM might also guarantee the $100 million issuance to obtain a better credit rating, but only if it saves more in interest than it would cost to insure the bonds, authority bond counsel Marc Feller said.

Those bonds also likely will be broken up so that between $10 million and $15 million of them are considered taxable due to the potential for a higher portion of private business at the city’s garages, Feller said.

Keller said he doesn't know how much AGM's insurance will cost, nor what interest paid over the life of the bonds is expected to be.

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